Australia and the South China Sea: debates and dilemmas

Key Issue
Intensifying disputes in the South China Sea present an acute challenge to Australia’s key interests and relationships in the Indo-Pacific.

The South China Sea disputes have
entered a dangerous new phase in the last several years. Alongside China’s unprecedented
construction and fortification of artificial features, incidents at sea
involving clashes between various combinations of fishermen, coast guards and,
occasionally, naval assets, are occurring on a routine basis. With the
nationalist credentials of authoritarian and democratically-elected claimant
governments at stake, the potential for miscalculation and escalation (whether
inadvertent or intended) is growing.

Australia’s aspirations for a viable
‘rules-based’ strategic order in the Indo-Pacific are under significant
pressure as regional powers contest the very nature and scope of these rules
via the disputes. Key Australian interests and relationships are being
tested.

China: a revisionist power?

As Australia’s largest trade
partner since 2007, China’s rise and pursuit of its ‘legitimate interests’ have
been supported by successive Australian governments. A key question
emerging from China’s recent actions in the South China Sea is where do these
‘legitimate interests’ begin and end—do they include the establishment of
‘spheres of influence’, the revision of existing regional and global norms, and
the right to resort to unilateral action to achieve these ends? From Beijing’s perspective,
these are all strategic behaviours that have been exhibited by previous great
power aspirants, including the US.

Whether coming to terms with China’s rise should
involve an element of genuine strategic ‘accommodation’,
as opposed to simply ‘engagement’, is a question that Australian policymakers
often appear reluctant to publicly canvass. In response to recent Chinese
actions in the South China Sea, Australia’s current strategy might be best
described as one of ‘dissuasion’—working
with others to convince China of the costs of unilateral actions, while
simultaneously using engagement to reinforce the benefits of the existing,
US-led regional order.

Even though the pay-offs thus far might appear
slight, the alternatives are perhaps even less appealing. Whether this calculus
would hold in the face of even more forceful Chinese actions—such as Beijing
proclaiming an Air
Defence Identification Zone in the South China Sea—or provocative moves by
other claimants, remains to be seen.

United States: ‘abandonment’ or ‘entrapment’?

The longstanding alliance with the US is routinely invoked
as the foundation of Australia’s security. The South China Sea disputes have forced
a sharper consideration of the benefits and risks of the alliance and the
conditions under which these could manifest. This has been most prominent in debates
surrounding whether Australia should replicate several recent ‘freedom of
navigation operations’ (FONOPs) undertaken by the US Navy through the contested
waters; in particular, whether Canberra should authorise naval FONOPs within
the 12-nautical-mile limit of China’s newly constructed artificial islands. China
has recently intensified warnings
of ‘serious measures’ should Australia seek to challenge Beijing’s claims
though naval operations.

The FONOPs debate reflects a dilemma common to all
alliances—the alternating anxiety between the fear of ‘abandonment’ by an ally
in the event of a conflict, versus the fear of ‘entrapment’ in an ally’s conflict
that is contrary to one’s own interests. Whilst some
argue that Australia’s interests demand FONOPs of the kind conducted by the US,
others
counter that such actions could draw the ire of China, with whom Australia also
seeks to maintain a good relationship.

These anxieties persist. The result has been a form
of ‘strategic ambiguity’ in which Australia has communicated
its intention ‘continue to traverse the water and the skies around the South
China Sea in accordance with international laws’ without saying whether it
would breach the limit of any claimed Chinese boundaries. Again, whether this
position could withstand a significant escalation of the conflict remains to be
seen.

ASEAN: a house divided?

Efforts by the Association of Southeast Asian Nations (ASEAN)
to engage
both China and the US in multilateral institution-building through venues such
as the East Asia Summit are a key focus of Australia’s diplomatic and strategic
planning. However, the failure to produce a long-awaited ‘code of conduct’ for
managing the disputes bodes poorly for multilateralism. Indeed, some contend
that China has deliberately delayed the code in order to ‘buy-off’
non-claimants such as Cambodia and Laos through increased aid and investment
while ramping up construction in disputed areas.

There is now a view
that ASEAN is irrevocably split on the South China Sea disputes following
several recent failures
to agree on consensus language. In the face of these divisions, some ASEAN
claimants have resorted to appeals to international arbitration
(which China says
it will not abide by), as well as more traditional power balancing strategies—upgrading
alliances and military cooperation, and intensified acquisition of advanced
maritime weaponry.

A former senior Australian official has warned
that ‘it is not in Australia’s interest for ASEAN to be divided into different
camps’. ASEAN’s inability to collectively endorse the international Permanent
Court of Arbitration’s July 2016 ruling against China’s claims has prompted some
experts to argue
that the organisation must reform its emphasis on consensus-based decision-making.

Looking ahead...

Facing difficult choices in its relations with China
and the US and the prospect of a divided ASEAN, Australia is likely to pursue
complementary initiatives to advance its maritime security interests. These
could include intensified ‘mini-lateral’ cooperation with other non-claimant
states such as India, Japan, Singapore and Indonesia, all of whom share
misgivings about China’s ambitions and actions. Indonesia will likely be a
focus given Jakarta’s increased concerns
with recent Chinese incursions into its maritime domain. Australia may also
face continued calls
to reconsider its approach to its maritime border issues with East Timor. In
the meantime, the risk of conflict continues to rise.

Further reading

US Center for Strategic and International Studies, Asia Maritime Transparency Initiative, website.

B Hayton, The South China Sea: the struggle for power in Asia, Yale University Press, 2014.